Stocks And Precious Metals Charts - Spring - Gold And Silver Snap Back, Stocks Dip

After a deep overnight spike lower in the precious metals futures, designed to run the stops and skin the spec long out, gold and silver managed to snap back in the NY trading hours.

Early this morning I was telling some guys to look for the big cap miners and the silver fliers to lead the way higher ahead of the bullion futures if we were going to get a reversal, or at least a relief rally.

And that is what happened. 

I did short the broader stock index, but only to provide a little hedge for the stock exposure in new miner longs taken on yesterday afternoon.  

But that worked too, in its own right, as a little air from yesterday's moon launch leaked out.

While March may be a potentially risky month for stocks, overall the climate for equities is still bubble friendly.

There will be a Non-Farm Payrolls Report on Friday. 

I think the wiseguys were covering their bullion shorts, and even covering shorts and going long into some of the miners.

Even quality names with fairly strong 3-4% dividends were crushed in this take down of the bullion. We were seeing price levels going back quite a while to multi-year lows on the charts.

The bullion bear raid freed up a quite a bit of gold from the ETFs, which will help to relieve the pressure on physical in London and Asia. 

Look for this kind of wash and rinse to repeat, as the gold pool continues to deteriorate. And surprisingly enough, silver seems to be getting in on this action.

JPM is sitting on a major silver hoard. Otherwise there are no central bank holdings of silver to speak of, to be deployed on leases to help out the bullion banks.

And while it was nice to make a gain on both ends, this was the trade for the day.

Let's see how we get past the Payrolls and finish the week, and try to determine if we have a practical bottom hereafter these antics, or not. 

It is tough to see a coherent pattern on the daily gold chart.

On the silver weekly chart, however, the W bottom is still holding strong and survived a backtest.

1 2
View single page >> |

Disclaimer: These are personal observations about the economy and the markets. In providing information, I hope this allows you to make your own decisions in an informed manner, even if it is from ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.